Abstract
This chapter uses the results of the macro and firm surveys to show the interaction between the deficient educational system and the high incidence of unskilled foreign workers and their implications. The results confirm part of the second hypothesis that in the short and medium term, the Gulf countries are unable to rely on local skills and local technologies and remain heavily dependent on both foreign skills and foreign technologies at the micro level. The findings show that the major reasons for heavy dependence on foreign technologies at the micro level are low levels of both skill and technology due to the deficient educational system and the high incidence of unskilled foreign workers and their implications. The findings show that the deficient educational system – due to low quality of education – and the excessive share of unskilled foreign workers led to low skill levels, poor provision of training, serious skills mismatch, weak linkages, lack of a networks and hindered the transfer of knowledge. These factors interacted with each other and led to poor technology indicators, poor indigenous capability to build the local technology and a heavy dependence on foreign technology. These results prove part of the third hypothesis concerning the low skill and technology indicators at the micro–macro levels: the serious implications of the interaction between the causes and consequences of the deficient educational system and the high use of unskilled foreign workers. The result confirm part of the third hypothesis that the major causes of low level of local technology are low/a lack of R&D activities due to a lack of skills, transfer of knowledge, networks and collaborations between universities and industry/firms. The findings show two surprising contradicting macro–micro views. The first contradicting optimistic – pessimistic micro and macro views regarding the incidence and success of knowledge transfer/external schooling effect implies that, probably, the transfer of knowledge/the external effects of schooling is successful within firms but is unsuccessful within society at large. The second contradicting optimistic-pessimistic macro and micro views concerning the self-reliance on local skills, and the role of both technological upgrading and upskilling in reinforcing it, implies that the self-reliance strategy is probably a preferred government strategy, but is not necessarily one followed by private firms.
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Notes
- 1.
As reported by 63 % of the respondent policy makers and experts to the macro survey.
- 2.
As indicated by 97 %, 83 %, 70 % and 70 % of the respondent policy makers and experts respectively.
- 3.
As reported by 79 % of the respondent policy makers and experts to the macro survey.
- 4.
As indicated by about 61 %, 54 %, 50%and 50 % of the respondent policy makers and experts to the macro survey respectively.
- 5.
We observe that the presence of high drop-out levels in the transition from schooling education to university education, which implies the lack of social awareness of the importance of tertiary education or preference of more certain short term return to available jobs than long term investment in education and skills.
- 6.
As in most other developing countries, the mismatch is attributed to deficiency in the educational system. Another interpretation in the Gulf countries attributes this to culture: i.e. preference for white-collar jobs.
- 7.
These results are also consistent with the findings of both El Sabaa (1997) and Haan (1999) respectively. “Reviewing the numbers of student enrolled in the UAE University shows that the total number of enrolled students in engineering, science, agriculture and medicine faculties in 1994 was nearly 24 % of the total number of the enrolled students. While the number of other theoretical faculties, mainly, literature, economics, education, and law in the same year were accounting for 76 % of the total number of enrolled students. The other foreign and private faculties operating in the UAE are stressing on the theoretical branches of education. Similarly, the Higher Faculties of Technology are also allocated the larger part of its studies to business management at the expense of other technological and engineering branches. This leads to imbalanced distribution of graduates and the limited contribution of researchers, technologists and engineering to the local manpower: It is noticeable that the larger segment of local manpower tends to prefer managerial and commercial domains. Thus, the number of theoretical faculties graduates has been much more than the vacancies available in managerial careers and government services” (El Sabaa, pp. 20–21). “While the UAE has in recent years made progress in developing its human resource base, its educational system is still largely geared towards general education and most of the students in higher education are found in humanity and similar studies. Technical skills are lacking and technical education and training, which historically does not enjoy much status in society, are lagging far behind. For instance, from the HCTs, the first one of which only opened their doors in the late 1980s, have so far graduated only 264 engineers, some of these graduates still lack a great deal of field practice. Moreover, most of the qualified people with technical skills still end up working in the government and white collar work in general reflecting the bias against technical and manual work in particular, very, very few actually work in practical jobs in private firms and other jobs which would require them to work in the field” (Haan, p. 37).
- 8.
At the aggregate level, the educational matrix implies the distribution of population according to educational level: low level of education refers to illiterate, literate, primary and preparatory school; medium level of education includes secondary, post-secondary and below university; and high level of education includes university and postgraduate levels.
- 9.
The transfer of knowledge and external schooling effects refers to knowledge transferred from knowledge holders (high skilled workers/people) to knowledge recipients (low skilled workers/people) – cf. Cowan, Soete and Tchervonnaya (2001, p. 9). Knowledge in this sense refers to know how or tacit knowledge embodied in people, and is different from the broad definition of technology, which refers to both embodied and disembodied knowledge.
- 10.
Another possible explanation for the low transfer of knowledge can be interpreted in relation to the prevailing conditions within private firms. Since within private firms most of the highly skilled posts as well as most of the low skilled posts are held by foreigners, there may be less incentives for the incidence of transfer of knowledge from high to low skilled workers.
- 11.
This result is consistent with the finding of El Sabaa (1997), who notes: “It is widely observed that industrial entrepreneurs in the technically advanced projects are strictly against leakage of their technologies outside their factories. Thus, they minimally contribute to developing the technology environment in the country. This adverse impact has been amplified by the unwillingness of foreign as well as local entrepreneurs to employ local manpower, to train them in their factories, either because they doubt their capabilities, or for fear to leaking their technology secret to other competitors. The limited supply of local industrial manpower, coincided with the unwillingness to employ them in both foreign and local industries applying advanced technologies, resulted in constricting the role supposed to be played by expatriate manpower in transferring technology to the industrial sector in the Gulf region. Moreover, the large scale industries despite using more sophisticated advanced technologies, however, they minimally contribute to elevate the technology transfer to the local industrial sector, as they strictly keep their operational and managerial techniques as top confidential secrete and prevent their leaking outside their units. To some extent, the chance of their flow to the rest of the operating factories seems better in the medium size factories” (El Sabaa, p. 22, pp. 24–25).
- 12.
The lack of transfer of knowledge can be interpreted as a lack of absorptive capacity, mainly related to deficiencies of education and continued dependence on imported technologies.
- 13.
As indicated by 82 % and 79 % of the respondent policy makers and experts respectively.
- 14.
As reported by 75 % of the respondent policy makers and experts.
- 15.
As indicated by 71 %, and 61 % of the respondent policy makers and experts respectively.
- 16.
As reported by 68 %, 54 %, 43 % and 35 % of the respondent firms respectively.
- 17.
As indicated by 55 %, 27 % and 27 % of the respondent firms respectively.
- 18.
As reported by 65 %, 42 %, 35 %, 29 % and 26 % of the respondent firms respectively.
- 19.
These results seem consistent with the findings of the earlier studies conducted by the UAE University (1994, 1997), Gray (1999) and Abdelkaraim and Haan (2002). For instance, the UAE Education Assessment Report (1994) shows that both technical and vocational education and training provision are unregulated, uncoordinated and unplanned, while the results of the UAE University (1997) show the limited contribution to private sector training provision by both the public and government sectors. Moreover, the findings of Gray (1999) show that only 30 % of the respondent firms provide systematic training. The provision of training is selective in most cases – focused on some occupational groups, but not others – and for two-thirds of the respondent firms, the provision of training was limited to on-the-job training. The study concluded that the UAE does not have a training-led employment culture. Employers have become used to bringing in their workers from outside the country with readymade skills and replacing them with similarly skilled workers. There has been little incentive to provide skill upgrading except in response to immediate needs such as the introduction of new technology. The local training industry has suffered from the uncoordinated nature of provision and the very limited contribution by public sector organisations and higher education institutions to this variety of provision. Most of training provision has been in low-investment, low-cost and quick-profit areas such as marketing, public relations, sales, computer awareness and management development. The private sector training is relatively undeveloped and un-coordinated, and has limited market due to both limited demand and limited supply. Moreover, the provision of public sector training is constrained by the inadequate involvement of public education institutions. For instance, the Higher Colleges of Technology (HCTs) had little involvement in the important area of adult technical education, including vocational training and retraining (Gray, p. 15, pp. 33–34, p. 43). Additionally, the findings of Abdelkaraim and Haan (2002) show that the UAE public sector training is still limited due to less attention, awareness and resources (Abdelkaraim & Haan, p. 15).
- 20.
It is convenient in this chapter to briefly indicate the consequences with respect to low skill and skills mismatch at the micro level and to discuss this more fully later in Chap. 6. That serves our aim in this chapter to compare and integrate the macro–micro consequences of low skill level – cf. Scheme 5.1. above. This brief discussion in this chapter also substantiates the third hypothesis in Chap. 1 above about the interaction between the deficient educational system at the macro level and the high incidence of unskilled foreign workers at the micro level and the serious implications on low skill levels and skills mismatch. It is appropriate to discuss the skills mismatch problem more extensively later in Chap. 6, where we provide a broader, more in-depth and coherent analysis of skill problem and the implications of the prevalence of low-skilled foreign workers at the micro/firm level.
- 21.
We define the mismatch as the differences between the required and actual education. Actual education refers to high (university and above), medium (secondary) and low (below secondary) levels of attained years of education that represent the supply of skills. We define the required education by the required qualifications for each of the occupational classes translated into average years of schooling that represent the demand for skills. We observe that the inconsistency between the required and actual education implies inconsistency between demand for and supply of skills, which we interpreted as skills mismatch – cf. the detailed discussion in Chap. 6 below.
- 22.
The value is measured in the UAE local currency: Dirham, which equalled 3.67 US Dollars when the survey was held (2002).
- 23.
We measured the contribution of a research unit to adapt the imported technologies qualitatively, by asking firms how the research unit contributed to adapting imported technologies. In addition to a lack of qualified workers, there may also be other factors such as a lack of incentives or pressure to adapt or master imported technologies as firms can always opt to buy the required technologies or techniques.
- 24.
This can also be interpreted as a lack of demand-pull since firms can buy all technologies or techniques. Our findings are consistent in some respects with the findings of Haan (1999) “R&D capacity in the UAE is presently very limited. While some research is taking place at the University and other institutes of higher education, it is -as usual in such institutions- more geared towards pure science and tend to have only limited relevance for the productive sector. While the Higher Colleges of Technology place emphasis on more practical training, hardly any R&D takes place, only as a by-product of the training. Within the private sector in the UAE likewise very few R&D activities are going on. Most manufacturing and other firms tend to rely on imported technologies (both in terms of hardware and software), as well as imported materials and even expatriate manpower. There is very little interest in carrying out research, and the R&D activities are small-scale in nature and mostly only concern -minor- adaptations to the companies’ own products. In all it is estimated that less than 1 % of turnover is used for this purpose. The parastatel sector, in which a number of large basic industries are operating, will do better. There is also some agricultural research ongoing. Without such R&D facilities and efforts, the UAE is almost completely dependent on imported technologies. And without the necessary adaptations to local conditions (e.g. temperatures, effects of dust and sand winds, special cultural aspects, the country’s socio-political system, etc.), even these technologies cannot be optimally applied. Moreover, a genuine technology culture to motivate the involvement in R&D and promotion of local technology is now absent in the UAE. The UAE society is geared more predominantly to non-technical education, training and employment. Technical qualifications and occupations are not rated very high by its social values and cultural traditions. The UAE only has a limited industrial tradition (e.g. trade), and lacks explicit policies to stimulate and direct technological development” (Haan, pp. 37–38).
- 25.
As reported by 73 %, 69 %, 69 % and 62 % of all respondent firms respectively.
- 26.
The terms new product and new process refers to new products and processes intended even just for local firm or for local market and not necessarily for the international market.
- 27.
Short, medium and long run refers to next 3 years, next 3–5 years and next 10 years respectively.
- 28.
As reported by 84 %, 37 % and 34 % of the respondent firms respectively.
- 29.
These results are consistent with the findings of El Sabaa (1997) “The adoption of different approaches in transferring technology differs according to certain criteria, such as: the scale of industry and its activity. Large size and some specific sectors, namely chemical and petrochemicals industries have better use of sophisticated advanced technologies” (El Sabaa, pp. 21–22).
- 30.
These results are consistent in some respects but differ in others with the findings of El-Sabaa (1997) and Haan (1999) respectively. “The major channels of technology transfer are: joint ventures, and industrial foreign projects, the latter accounts for the first source of technology transfer. The turn-key projects are preferred channel of technology transfer in the Gulf region mainly because of the keenness to avoid defects of execution and to guarantee the maximum consistency of the project’s design, lines of production, quality of the products, facilities of training, etc. But it has very limited role in transferring technology to local industry, because it is confined to their plants, with no minimum leakage allowed. Thus they contribute nothing to implant advanced technologies in the country. Technology transfer to the UAE has obviously contributed to accelerating industrial and economic growth, elevating the standard of national products both quality- wise and quantity-wise. In particular, the transfer of technology contributed to rapid growth of local industrial sector. However, a number of negative factors are still adversely affecting the transfer of technology, the technologies transferred could hardly approach its target of constituting an autonomously developing local technological base, similar to those in the Far East industrial countries. Because of: the inadequate awareness of the end target of technology transfer, the lack of a constitutional framework or comprehensive plan for transferring technology, the insufficient local base of technological data, the lack of qualified local manpower necessary for transferring technology and the contracts of technology transfer” (El Sabaa, pp. 23–26).“……. The UAE is almost completely dependent on imported technologies. And without the necessary adaptations to local conditions (e.g. temperatures, effects of dust and sand winds, special cultural aspects, the country’s socio-political system, etc.), even these technologies cannot be optimally applied” (Haan, p. 38).
- 31.
Our assumption and respective findings are plausible and consistent with the results of El Sabaa (1997), which indicate numerous different channels of technology transfer to the UAE, such as: foreign industrial investments, offset programs, training missions, technological imports, industrialization licenses, patents, technological products, foreign manpower and industrial consulting offices (El Sabaa, p. 26).
- 32.
For instance, Fasano (2002) indicates that other than Abu Dhabi, the emirates have established free zones that allow 100 % foreign ownership of companies. These zones are particularly important in Dubai, where they have attracted a large number of foreign companies (Fasano, p. 331). El Sabaa (1997) finds that the adoption of open market philosophy, supported by the existence of nine free zones in the seven emirates and the advantage of 100 % foreign ownership and control, encourages foreign industrial investors to set up their projects and to promote technology transfer to the UAE (El Sabaa, p. 23).
- 33.
As indicated by 90 %, 90 %, 80 %, 75 % and 60 % of the respondent firms respectively
- 34.
As indicated by 43 %, 15 % and 86 % of the respondent firms respectively.
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Nour, S.M. (2013). Assessment of Skill and Technology Indicators. In: Technological Change and Skill Development in Arab Gulf Countries. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-01916-1_5
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